GRAINS-Mild U.S. weather knocks corn futures to lowest since 2010

Tue Aug 6, 2013 1:53am IST

* Rain, mild weather fuel forecasts for big harvests
    * Private forecaster pegs U.S. soy crop below traders'
expectations
    * Wheat tumbles on technical selling, spread unwinding

 (Adds closing prices)
    By Tom Polansek
    CHICAGO, Aug 5 (Reuters) - U.S. corn futures slid on Monday
to their lowest level in nearly three years as outlooks for
favourable crop weather encouraged forecasts for a record-large
U.S. harvest.
    Wheat futures dropped to their lowest level in more than a
year on technical selling and as investors unwound spread
trades.
    Importers and domestic corn buyers are delaying large
purchases ahead of the autumn harvest because they expect prices
will drop further, traders and analysts said.
    The harvest is expected to replenish historically low
supplies of corn and soy after the worst U.S. drought in more
than 50 years devastated output last year.
    "All buyers are just 'hands in their pockets,' knowing we
have a harvest in front of us," said Don Roose, president of
U.S. Commodities brokerage.
    Chicago Board of Trade September corn ended down 6-3/4
cents to $4.69-1/4 a bushel after touching a session low of
$4.65-1/2. That was the lowest price for a front-month contract
since October 2010.
    The nearby contract has dropped 44 percent since reaching a
record high of $8.43-3/4 a bushel a year ago as the drought
raged.
    December corn, which represents the next harvest, fell
3-1/4 cents to $4.60-1/2 a bushel.
    Private crop forecaster Informa Economics trimmed its
estimate for corn production 0.8 percent to 14.14 billion
bushels. That would still be a record crop and topped the U.S.
Department of Agriculture's latest forecast for 13.95 billion
bushels. 
    Two other forecasters, INTL FCStone and Lanworth, last week
predicted the corn harvest will exceed the USDA's current
outlook.  
    
    INFORMA CUTS SOY OUTLOOK
    Informa lowered its estimate for soybean production 3.3
percent to 3.266 billion bushels, keeping it below USDA's
estimate for 3.42 billion. The harvest would be still be massive
but was smaller than traders anticipated.
    The outlook fed a perception that "if there's going to be a
bullish production surprise, it's probably going to be on the
soybean side," said Jim Gerlach, president of A/C Trading. He
said too much rain during crop development can be unfavourable
for soy plants.
    August soybeans slid 1-1/4 cents to $13.29-3/4 a
bushel, while new-crop November soybeans rose 1-3/4 cents
to $11.83-1/4 a bushel.
    The USDA will update its harvest estimates in a monthly
report on Aug. 12. 
    A weekly USDA crop progress report due later on Monday will
give traders a fresh indication about the development of corn
and soybeans. 
    Soybeans felt additional pressure from China's plans to
release 500,000 tonnes of soybeans from its reserves this week
because the sales could slow imports, traders said. Chinese
prices, however, were likely to be more expensive than imported
soy, some traders said. 
    CBOT wheat sank as traders unwound long wheat/short corn
spreads after wheat became too expensive relative to corn,
traders said. Both grains are used to feed livestock.
     Front-month September wheat tumbled 15-1/4 cents to
$6.45-1/4 a bushel after touching a low of $6.41-1/2. That was
the lowest price for a nearby contract since June 2012.
    
 Prices at 3:15 p.m. CDT (2015 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  469.25    -6.75  -1.4%  -32.8%
 CBOT soy                  1329.75    -1.25  -0.1%   -6.3%
 CBOT meal                  402.60    -9.50  -2.3%   -4.3%
 CBOT soyoil                 42.72     0.34   0.8%  -13.1%
 CBOT wheat                 645.25    -3.50  -0.5%  -17.1%
 CBOT rice                 1576.00    -4.00  -0.3%    6.1%
 EU wheat                   184.00    -2.50  -1.3%  -26.5%
 
 US crude                   106.46    -0.48  -0.5%   15.9%
 Dow Jones                  15,612      -46  -0.3%   19.1%
 Gold                      1302.21    -9.29  -0.7%  -22.2%
 Euro/dollar                1.3258  -0.0023  -0.2%    0.5%
 Dollar Index              81.8590  -0.0520  -0.1%    2.6%
 Baltic Freight               1058       -7  -0.7%   51.4%
 
 (Additional reporting by Gus Trompiz in Paris and Naveen
Thukral in Singapore; Editing by James Jukwey, Grant McCool and
David Gregorio)
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